Bullish Close For SPX As VIX Nears Potential Low?
SPX and QQQ somewhat diverged today, largely thanks to the solidly red candles on the semiconductors. But SPX closed with a bullish look as the VIX plunged further into the mid-15s. SPX is only 27.6 points away from 7600 as of today’s close, and GEX is supportive of a move higher. How long will such a move last? QQQ shows 700 as the largest net GEX cluster expiring this week, and the VIX is in a zone that has marked lows going on 2 years, so any spike for SPX may be short-lived until later in the year.
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SPX Closed Above The Daily HMA
SPX and IWM still look the most bullish overall compared to QQQ, with SPX closing just above the daily HMA by about 7 points. Positive total net GEX and the 3 largest clusters at 7500, 7550, and 7600 certainly justify a test of the upper Dealer Cluster, which spans 100 points from 7600-7700. You may remember the weekly HMA we’ve been mentioning at 7625 currently, which may be an “overshoot” target to watch.
SPX really needs to lose 7500 to increase the odds of a more bearish resolution, and we did see heavy negative option activity at the 7450 strike, as shown under Cumulative Net Flow.
Key Levels: Bullish above 7565 targeting 7600-7625. Bearish below 7564 targeting 7529, then 7500.
QQQ Looks Bruised, BuT Merely A Flesh Wound, So Far
QQQ was battered from the bullish-looking open, selling all the way down to the 710 level before rebounding to close above the HMA (fortunately for bulls). The 0 DTE picture helped us navigate this mess in Discord, where we posted within 40 minutes of the open that QQQ would likely target 710 below 715, all courtesy of what GEX was already showing us. While QQQ closed below 720, maintaining the daily HMA at 716.96 leaves open favorable odds that QQQ finds a way back over 720, targeting 730-740. Before we look at what we view as key levels, let’s first look at the 3D picture, because the remainder of the week may be trickier than your average OpEx week.
QQQ Suggests Another 700 Test Is Incoming
Looking at our 3D model, 700 is the largest net GEX cluster expiring this week, with 709 and 715 fairly close in size. Each of these dwarfs the visible positive GEX, though a visit of 700 may see a bounce, if the current picture stays relatively the same upon QQQ reaching that target. A break of 710 will likely bring 700 in short order, but a move back over 720 could bring 730 as we already mentioned, so we’ll be watching QQQ level to level for the remaining 2 days of trading this week.
Key Levels: Bullish above 718 targeting 720, 730. Bearish below 710 targeting 700, possibly 690.
The VIX May Be Targeting A Gap FIll To 15.25
The VIX has been tightly hugging the HMA as it descends toward the rising lower Keltner channel. In the meantime, the %b (20,2) indicator is almost to zero again, a condition that is often seen near turning points. While the VIX may not get very far with an attempted bounce (which is yet to be seen), we could either continue chopping between 15-18 for awhile, or we could see a larger spike. But it’s unlikely we see sustained prices below 15 for reasons we will discuss in the next section.
The VIX Is Likely Bottoming, 13 and 14 Readings Rare Since 2024
Since December 2024, the VIX barely reached 14 on a handful of occasions, and never touched 13, making a low for one day at 13.39 in December before embarking on an impressive march higher (no pun intended) into March 2026. Today’s drop in the VIX brought the VIX to a test of the HMA at 15.59, and as we just discussed, we could see a move down to fill the gap around 15.25. The GEX picture doesn’t currently justify a move lower than 15, so the VIX is likely bottoming here, and soon, raising the question of whether or not we actually see a Thursday or Friday selloff instead of a rally. We will pay attention to the opening gaps tomorrow and Friday as well as the 0 DTE GEX picture in the cash session. We hope you’ll join us!
Key Levels: Bullish (for the VIX) above 16 targeting 18-20. Bearish below 16 targeting 15-15.25.
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